ETF Securities: Investors sell commodities on China downgrade fears

Inflows into crude oil ETPs

ETF Securities has reported the worst weekly outflows from diversified commodity ETPs in six months, as rising inventory levels among individual commodities and Moody's decision to downgrade China's sovereign credit spooked investors.

During the week to 2 June, flows out of ETF Securities' diversified commodity ETPs climbed to $80m, the largest weekly outflow since November 2016, as commodities continued to be the worst performing major asset class. On 24 May, China suffered its first debt downgrade since 1989 after Moody's Investors Service dropped the country's long-term local currency and foreign currency issuer ratings by one notch to A1 from Aa3. Michael Wang, director, equity strategy at ETF Securities, said although China's re-rating was not directly linked with diversified commodities, investors realise slo...